This yearly digest summarises all ITAT stories published in 2023 at taxscan.in
The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that application for registration under Section 12AA of Income Tax Act ,1961 should not be denied in absence of dissolution clause in trust deed.
After reviewing the facts and submissions of the both parties, the two member bench of B.R.R. Kumar (accountant member) and Chandra Mohan Garg, (Judicial Member) directed to grant registration to the assessee-trust under Section 12AA of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that receipts from disaster recovery up-linking services are not Royalty. Therefore the bench deleted the addition made by the assessing officer.
After reviewing the facts and submissions of both parties, the two-member bench of B.R.R. Kumar,(account member) and Saktijit Dey, (Vice-President) held that receipts from disaster recovery up-linking services are not Royalty.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that receipts from provision of Disaster Recovery Up-Linking Services and disaster recovery play-out services are not Fee for Technical Service (FTS) under India-Singapore Double Taxation Avoidance Agreement (DTAA).
The tribunal observed that the receipts from disaster recovery playout services are not in the nature of FTS as they do not make available any technical knowledge, experience, skill, know-how, or process or consist of the development and transfer of any technical plan or technical design.
After reviewing the facts and submissions of both parties, the two-member bench of B.R.R. Kumar (account member) and Saktijit Dey (Vice-President) held that payments received by the assessee as consideration for providing disaster recovery playout services are not taxable as FTS.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that addition should not be made on different rates booked by real estate brokers for selling property between the different buyers.
After reviewing the facts and submissions of both parties, the two-member bench of N. K. Billaiya (account member) and Anubhav Sharma (Judicial Member) observed that there is no iota of evidence that the assessee has received any extra money over and above the booking rate shown by the assessee in the books of account and the entire addition is based on surmises, conjectures and presumption. Therefore, the addition should not be made on different rates booked by real estate brokers for selling property between the different buyers.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has directed re-adjudication taking cognizance of evidence as the Commissioner of Income Tax Appeals (CIT(A)) passed order not on merits.
A Single Bench of Suchitra Kamble (Judicial Member) allowed the appeal holding that It was pertinent to note that the CIT(A) had not passed the order on merits of the issue contested by the assessee. Therefore, in the interest of justice it was appropriate to remand back this matter to the file of the CIT(A) for proper adjudication of the issues contested therein and after taking cognizance of the evidence filed by the assessee decide the case on merit.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has remanded a case back to the Assessing Officer (AO) to decide whether interest paid on a loan taken for repayment of an earlier loan for the construction of a property is deductible from House Property Income under section 24(b) of the Income Tax Act, 1961.
The Two Bench Member comprising B.P. Singh (Judicial Member) and Rakesh Bhargava (Accountant Member) has partly allowed the assessee’s appeal for statistical purposes, the issues raised in the appeal will be reevaluated by the Assessing Officer. The final decision on the disallowances of interest expenses will be made by the AO after further examination as per the directions given by the ITAT.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has granted relief to Shell India quashing the demand of Rs 105 77,29,782 on the ground of limitation.
The two-member Bench of Amit Shukla, (Judicial Member) and Amarjit Singh, (Accountant Member) quashed the final assessment order being barred by period of limitation under Section 92CA (3) of the Income Tax Act.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has ruled that sub-contracting charges are not taxable in India if no technical knowledge is transferred to the Indian entity and held that the assessee in this case, a United States based company, did not make available any technical knowledge to its Indian subsidiary, and therefore the sub-contracting charges were not taxable in India.
The Tribunal noted that the DRP in the case of LW US had held that the sub-contracting charges in that case were not taxable in India as per the provisions of India-USA DTAA. The Tribunal found that the facts of the two cases were similar, and therefore it was bound by the decision of the DRP in the case of LW US.
The Two-member bench comprising G.S. Pannu (President) and Astha Chandra (Judicial Member) ruled that sub-contracting charges received by the assessee from SPi India are not taxable in India under the India-USA DTAA. The assessee did not provide any technical knowledge, experience, skill, know-how, or processes to SPi India, resulting in the sub-contracting charges not being considered “fees for included services” under Article 12(4) of the DTAA.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has ruled that employers can claim a deduction on employees’ PF contributions even if the payment was made after the due date. The ITAT held that the term “month” in section 36(1)(va) of the Income Tax Act, 1961 should be considered as the month in which the salary or wages are actually disbursed, rather than the month for which the salary or wages are due.
The Two Member Bench comprising N.K. Billaiya (Judicial Member) and C.N. Prasad. (Accountant Member) has returned the issue to the Assessing Officer’s file, following Mumbai Bench directions in The Master Polishers Vs. ACIT (supra). The Assessing Officer must verify the “due date” in the PF Act. The Revenue’s claim for deduction of ESOP expenses under section 37(1) of the Act has been allowed, allowing the appeal partly for statistical purposes.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that income from the business of renting equipment of residual management does not fall under house property income and held that the assessee’s business was not the business of renting out the equipment, but the business of acquiring and dealing in unguaranteed residuary interest in the assets rented to customers.
The ITAT observed that the assessee had followed the same accounting method in earlier years and subsequent years and that the Revenue Department had not objected to it in those years. It was also noted that the assessee had explained its business model in detail and had provided a diagrammatic presentation of the same. The ITAT was satisfied that the assessee’s explanation was clear and that the assessee’s accounting method was correct.
The Two-member bench comprising of Sandeep Singh Karhail (Judicial Member) and Prashant Maharshi (Accountant Member) dismissed the appeal of the Revenue Department and confirmed the order of the CIT(A). The ITAT held that the addition made by the Revenue Department was not justified, as the assessee’s income was not the rental income but the income earned in the business of acquiring and dealing in unguaranteed residuary interest in assets rented to customers.
The Income Tax Appellate Tribunal (ITAT) Mumbai Bench directed the deposit cost of Rs. 20,000/ in Prime Minister Relief Fund due to non-compliance of notice issued by the CIT(A) during appeal proceedings. The tribunal observed that the assessee failed to substantiate the claim in respect of deposit of cash made in bank account.
It was observed by the tribunal that the CIT(A) has issued as much as four notices and thereafter issues final opportunity but no effective compliance was made on the part of the assessee. Thus, it is evident the assessee has not cooperated before the lower authorities for verification of the it’s own documents and claims
After reviewing the facts and submissions of the both parties, the two-member bench of Om Prakash Kant (Account Member) and Kavitha Rajagopal (Judicial Member) held that restore the issue back to the CIT(A), however, looking at the non-compliant conduct of the assessee and total disregard of the proceedings before the CIT(A), imposed a cost of Rs. 20,000/-. The assessee was directed to deposit the same into Prime Minister Relief Fund within seven days of receipt of this order.
The Chandigarh Bench of Income Tax Appellate Tribunal (ITAT) has granted registration to Panjab Plastic Waste Management Society which is formed with the main aims and objects to set up a mechanism for collection, transportation, treatment & disposal of plastic material under Section 12A of the Income Tax Act 1961.
The two-member Bench of A.D. Jain, (Vice President) and Vikram Singh Yadav, (Accountant Member) observed that the objects of the Assessee society were charitable and the activities of the Assessee society were genuine, as provided under Section 12AA of the Income Tax Act. The bench set aside the rejection of Assessee’s application dated 19.5.2019, filed in Form No. 10A for registration, holding that was erroneous and not sustainable in the eyes of law. Hence, the bench allowed the appeal filed by the assessee granting registration to the Assessee society.
The Income Tax Appellate Tribunal (ITAT) Indore bench held that Section 115BBE of the Income Tax Act, 1961 is not applicable on surrendered income on account of excess stock found during the course of Survey. Even if excess stock found during survey was not recorded in the books of account but during the filing of return it was surrendered and entered the books of account of assessee would not be considered as unexplained investment.
After reviewing the facts and submissions of the both parties, the two member bench of B.M. Biyani (Accountant Member) andVijay Pal Rao (Judicial Member) held that excess stock found during survey was a part of entire lot of stock of assessee, part of which is recorded in books of account. Therefore, the assessee surrendered the excess stock and also offered to tax in the return of income then the excess stock could not be treated as deemed income under Section 69 of the Income Tax Act.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee was not required to deduct tax at source under Section 40(a)(ia) of the Income Tax Act, 1961 on submission of Form 15G and 15H.
While allowing the appeal, the two-member bench consisting of Annapurna Gupta (Judicial member) and Siddhartha Nautiyal (Accountant member) held that penalty imposed under section 271C of the Income Tax Act for failure to deduct tax at source is to be set aside.
The Bangalore bench of the Income Tax Appellate Tribunal held that any failure to pay within the prescribed due date under the respective PF Act or Scheme will result in negating employer’s claim for deduction permanently forever under section 36(1)(va). Also there is no exemption regarding payment is related to April, 2020, which is during the Covid period
The two bench member consisting of Beena Pillai (Judicial member) and Chandra Poojari (Accountant member) held that regarding the plea of the assessee that payment is related to April, 2020, which is during the Covid period, in our opinion, there is no exemption granted by Government in this regard. Thus the appeal was rejected.
The Rajkot bench of the Income Tax Appellate Tribunal (ITAT) has allowed only 10% of the cash deposits made by an assessee as taxable income, citing a lack of evidence of the source of the deposits and held that the assessee had not been able to establish the source of the cash deposits, and therefore, only 10% of the total deposits could be taxed.
The Two Member Bench comprising Waseem Ahmed (Accountant Member) and Siddhartha Nautiyalpartly (Judicial Member) allowed the appeal of the assessee. The Tribunal agreed with the assessee’s contention that the entire amount of cash deposits could not be treated as unexplained income.
The Income Tax Appellate Tribunal (ITAT), Indore bench held that subsidies received from the government of Maharashtra under package scheme incentive is capital receipt.
It was observed by the tribunal that the same issue was decided in favor of assessee for the assessment year 2015-16 as well as for assessment year 2016-17 by the Mumbai Bench of the Tribunal. It was held that the subsidy received by the assessee under PSI, 2007 is a capital receipt and thus non-taxable.
After reviewing the facts and submissions of the both parties, the two member tribunal bench of B.M. Biyani, (Accountant Member) and Vijay Pal Rao (Judicial Member) allowed the appeal filed by the assessee.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the interest under Section 24(b) of the Income Tax Act 1961 which allows deduction of interest on home loan from the taxable income would be allowable when the charging of Income receivable and income was approved.
A Single Bench of Suchitra Kamble, (JUDICIAL MEMBER) observed that, “On merit, the assessee claim deduction under Section 24(b) on the interest paid on the loan availed against the rented property taken on lease from Noida Authority. The Noida Authority and the assessee had certain disputes but it is undisputed fact that the assessee has taken loan for the said property and was liable to pay interest to Noida Authority.” The Bench allowed the appeal filed by the assessee holding that since the Assessing Officer had assessed the income receivables from the assessee then the said income receivables was supposed to be in respect of loan taken for the property from Noida Authority for which the assessee was paying the interest.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that if the last date for depositing of payment of Provident Fund (PF) is a holiday and the payment is made on the next date, the same should be allowed. After hearing both the parties, the two bench member consisting of Astha Chandra (Judicial Member) and Shamim Yahya (Accountant Member) agreed with the submissions that if the last date for depositing of payment is a holiday and the payment is made on the next date, the same should be allowed. The tribunal also felt it appropriate to remit the issue back to the file of AO for examining the payments made on day next to due date, being holiday on due date and allow the deduction accordingly. Thus, the appeal was allowed.
The Income Tax Appellate Tribunal (ITAT), Indore bench held that subsidies received under Industrial promotion scheme is revenue in nature. The subsidies are provided to assessee for initial support to the industry during the earlier days to enable it to become operational competitive with other established industries.
After reviewing the facts and submissions of the both parties, the two member tribunal bench of B.M. Biyani, (Accountant Member) and Vijay Pal Rao (Judicial Member) held that the subsidy received by the assessee under Industrial Promotion Scheme of Madhya Pradesh is revenue in nature. Therefore, the bench decided the ground against the assessee.
The Income Tax Appellate Tribunal (ITAT) Indore bench held that excess cash found during course of survey should not be taxed under head of business income. Therefore, it would attract higher tax rate under Section 115BBE of income Tax Act, 1961
It was observed by the tribunal that the survey-officer found excess cash. When the assessee’s partner was asked to explain the difference, he himself explained the difference related to purchase and admitted his inability to explain the remaining difference of Rs. 5,82,644/- which is very much clear from the reply given by him at the very first stage of recording statement itself.
The tribunal after reviewing the facts and submissions of the both parties, the two member bench of B.M. Biyani (Accountant Member) and Vijay Pal Rao (Judicial Member) upheld that action of lower-authorities in holding excess cash as deemed income u/s 69A attracting higher rate of tax under Section 115BBE of Income Tax Act. Therefore, excess cash should not be taxed under the head of business Income. Thus, the bench decided the issue in against the assessee.
The Income Tax Appellate Tribunal (ITAT) Surat Bench directed readjudication for granting recognition under section Income Tax Act and held that without completing registration recognition under Section 80G not granted.
After eviewing the facts and submissions of the both parties the two member bench of A.L.Saini(account member) and Pawan Singh, (Judicial Member) the file remitted back to CIT(exemption) to grant recognition under Section 80G of the Income Tax Act in accordance with law.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the actual sale consideration should be taken as the basis for computing the long-term capital gain and upheld the assessee’s long-term capital gain calculation of Rs. 1,28,15,633/-
The Two Member Bench comprising Shamim Yahya (Accountant Member) and C. N. Prasad (Judicial Member) held that the Income Tax Officer, Ward 3(4) Gurgaon, had no jurisdiction over the Assessees, and therefore, the notice issued by him for reassessment was illegal and invalid. Consequently, the reassessment orders passed by the Income Tax Officer, Ward 3(4), for the assessment year 2010-11 in all three cases were quashed.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has held that the concessional rate under Section 115 of the Income Tax Act 1961 is not applicable when the money deposited is in Indian Rupees and not in foreign exchange currency.
The two-member Bench of Chandra Poojari, (Accountant Member) and Beena Pillai, (Judicial Member) observed that the money into this bank account had been deposited in the Indian currency and from that account assessee said to be purchased specified assets. As per Section 115E of the Income Tax Act, the concessional rate of 10% on the capital gain derived from the specified assets, which were acquired out of convertible foreign exchange was available to the assessee.
The Bench dismissed the appeal filed by the assessee pointing out from the SB account, that the assessee had deposited Indian rupees to that account and consequently purchased the specified assets and it was not on convertible foreign exchange.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that start-up businesses can deduct all revenue expenses, even if the business has not commenced, and held that the expenses are allowable as a deduction under Section 30(1) and Section 37(1) of the Income Tax Act, as they are incurred “wholly and exclusively” for the purpose of the business.
The Tribunal observed that entries in the books of account were not relevant for computing total income, as the expenses were allowable as deductions even if not reflected in the books of account.
The Two Bench Members comprising Rahul Chaudhari (Judicial Member) and B.R. Baskaran (Accountant Member) held that the revenue expenses incurred by the assessee were incurred “wholly and exclusively” for the purpose of the business and that they were not specifically disallowed by any other provision of the Act. Therefore, the Tribunal held that the expenses were allowable as a deduction under Section 30(1) and Section 37(1) of the Act.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that Section 56 (2)(viib) of the Income Tax Act 1961 which are crucial in preventing tax evasion and ensuring fair taxes with regard to the issuance of shares by closely-held companies would not be applicable to share premium received from a non-resident person.
The two-member Bench of Shamim Yahya, (Accountant Member) and Yogesh Kumar Us, (Judicial Member) observed that as per the provisions of Section 56(2)(viib), of the Income Tax Act the section would not be applicable to the share premium received from a non-resident Person. The Bench further noted that noted that Vivek Chaudhri had himself submitted before the AO duly noted in a note-sheet that he was a resident through the concerned period and allowed the appeal filed by the revenue and remitted back to the file of the AO to pass order after giving opportunity to the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that is trite law that in order to invoke Section 263, the assessment order must be erroneous and also prejudicial to revenue, also impugned revisionary proceedings invoked under section 263 of the Act cannot be upheld.
The two-member bench consisting of G.S Pannu (President) and Sandeep Singh Karhail (Judicial member) held that the revisionary proceedings have been found to be without jurisdiction and thus the impugned order passed by the learned PCIT under Section 263 of the Income Tax Act has already been set aside, the tribunal expressed no findings and the same is left open. Thus the appeal was allowed.
The Delhi bench of the Income Tax Appellate Tribunal held that no interest under section 234B of the Act can be charged as the assessee, being a non-resident company was not liable to pay advance tax, since, the payer is under an obligation to withhold tax under section 195 of the Act while making payment to the assessee. Also the receipts from sale of software licenses are not in the nature of royalty income. Thus, though such income may be in the nature of business profit, however, no part of which can be attributed to the PE in India
The two-member bench consisting of G.S pannu (President) and Saktijit Dey (Vice President) came to the conclusion that the receipts from sale of software licenses are not in the nature of royalty income. Thus, though such income may be in the nature of business profit, however, no part of which can be attributed to the PE in India. Thus, the tribunal’s decision in the said appeal will apply mutatis mutandis to the appeal. Thus, the appeal of the assessee was allowed.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty under Section 68 of the Income Tax Act 1961 holding that a separate Permanent Account Number (PAN) and filing of return would not be needed when receipts of institutions had been included in the financial statement of the controlling entity.
The two-member Bench of Chandra Mohan Garg, (Judicial Member) and Pradip Kumar Kedia, (Accountant Member) allowed the appeal filed by the assessee holding that if an institution was owned and run by some society or trust then every institution need not to take separate PAN number and thus not required to file separate return of income particularly in a situation when the receipts of such institution are taken care and included in the income and expenditure account or controlling entity or society or trust.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted additions made by the Assessing Officer (AO) under Section 68 of the Income Tax Act 1961 which deals with unexplained cash deposits in the absence of any incriminating material.
From the perusal of the order passed under Section 143(3) read with Section 153C of the Act, the two-member Bench comprising of Amarjit Singh, (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) found that the AO made the addition under Section 68 of the Income Tax Act only on the basis of AIR information.
Therefore, it was discernible that the aforesaid addition was not based on the material found during the course of the aforesaid search, pursuant to which proceedings under Section 153C of the Income Tax Act were initiated in the case of the assessee.
The Bench further referred to the decision in DCIT v/s U. K. Paints (Overseas) Ltd and allowed the appeal and deleted the penalty holding that the assessment year under consideration was an unabated/concluded year.
The Surat Bench of Income Tax Appellate Tribunal (ITAT) has held that the weight of diamonds should be excluded to determine the gross weight of jewellery seized by the Income Tax Department.
A Single Bench of Pawan Singh, (Judicial Member) allowed the appeal filed by the assessee holding that merely because jewellery consisted diamond could not be added in the hands of assessee particularly when the jewellery had forming part of gross weight jewellery found from the residence as well as locker was within permissible limit prescribed by CBDT in Circular No.1916 dated 11.05.1994.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the services rendered by Indian Company to non-resident assessee on principal-to-principal basis based on Canvasser Agent Agreement not taxable in India.
The two-member Bench of S. Rifaur Rahman, (Accountant Member) and Rahul Chaudhary, (Judicial Member) dismissed the appeal filed by the revenue holding that, “when the Agreement was in operation, concluded that the Indian Company was acting in ordinary course of business rendering services to the Assessee on principal-to-principal basis; the Assessee did not have a business connection in India; no operations were carried out by the Assessee in India; and therefore, no income was liable to tax in India in terms of Section 5(2) and Section 9(1)(i) of the Act.”
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
